The mayor says City Hall is facing a $1 billion budget gap by next year, and layoffs could come within months.
The exact number of layoffs is yet to be determined because state law mandates that job cuts are based on seniority.
Many inner-city schools could be the hardest hit because a majority of its staffs are new hires.
The mayor, who might run for governor next year, echoed the White House and made no promises for a quick economic turnaround.
"These are no ordinary times," the mayor said in his annual state-of-the-city address. "The recession is taking a terrible toll."
The Associated Press contributed to this story.
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